IMPLEMENTATION OF THE AMERICAN 

RECOVERY & REINVESTMENT ACT OF 2009

CLEAN WATER & DRINKING WATER STATE REVOLVING FUND PROGRAMS

Protecting public health and the environment 

while creating jobs and revitalizing the economy 
“We are meeting at a defining moment

for our nation. We continue to pull 

ourselves up and out of the most severe 

economic downturn since World War 

II. The President’s Recovery Act has cut 

taxes for the vast majority of middle 

class families and provided critical 

resources to local governments so 

they can keep teachers, fire fighters, 

and police officers in their jobs. It 

has helped EPA invest in critical water 

infrastructure projects, clean diesel 

retrofits, brownfields cleanups, and 

more.Those investments don’t just create 

jobs. They leave our communities clean 

and healthier – better places to buy a 

home or set up a business. That is exactly 

what President Obama means when he 

talks about building a new foundation 

for prosperity. The economy is growing 

again. But there is much work to be done

to keep it growing – and growing faster.”

Lisa P. Jackson

Administrator, United States Environmental Protection Agency

January 25, 2010
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 3

Table of Contents

The American Recovery and Reinvestment Act of 2009: 

Creating Jobs, Revitalizing the Economy, and Investing

in a Sustainable Future. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

The SRF Programs Deliver Results. . . . . . . . . . . . . . . . . . . . . . . . . 6

Clean Water State Revolving Fund Case Studies. . . . . . . . . . . 11

Drinking Water State Revolving Fund Case Studies. . . . . . . 16

Appendix: Coordinated Implementation of ARRA. . . . . . . . . . 19

ARRA Timeline. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ARRA Statistics At A Glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Note: Data used throughout this report are from: 

a. The Clean Water and Drinking Water SRF National Information Management Systems, 

reported through June 30, 2010.

b. The Clean Water Benefits Reporting System and the Drinking Water SRF Project & 

Benefits Reporting System. Data were downloaded on January 24, 2011. 
4 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

 THE AMERICAN RECOVERY AND 

REINVESTMENT ACT OF 2009

Creating Jobs, Revitalizing the Economy, and

Investing in a Sustainable Future

In response to the recent economic recession, 

Congress passed the American Recovery and 

Reinvestment Act (Recovery Act or ARRA) of 

2009, and President Obama signed it into law 

on February 17, 2009. ARRA was intended to 

preserve and create jobs, promote economic 

growth, and invest in environmental protection 

and infrastructure for long-term economic 

productivity. To help achieve these goals, the 

legislation appropriated $7.2 billion to programs 

administered by EPA to protect and promote 

green jobs and a healthier environment, $6 

billion of which was funding for states to 

finance high-priority infrastructure projects 

needed to improve the provision of safe drinking 

water and protect and restore our surface waters 

for public health, recreation, and wildlife.

As provided in the Recovery Act, the Clean Water State Revolving Fund (Clean Water SRF) 

programs received $4 billion, and the Drinking 

Water State Revolving Fund (Drinking Water SRF) programs received $2 billion. These 

significant appropriations were a response to 

the large water and wastewater infrastructure 

needs in this country and served as recognition of the effectiveness of the SRF programs 

in delivering water and wastewater infrastructure. Indeed, clean water is a basic necessity for 

economic growth and human health. 

Since the enactment of ARRA, the SRF programs have worked hard to fund important 

water and wastewater infrastructure projects 

and shepherd those projects to completion. 

EPA provided critical support and guidance 

to states, and states adapted their programs 

and streamlined the SRF implementation process to get the ARRA money to communities 

as soon as possible. Many state programs increased the amount of money they normally 

award to projects through the SRFs by more 

than two-fold, and they did so in about half 

the time it normally takes. 
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 5

The results of the Recovery Act are truly impressive, as demonstrated by the rise in real 

gross domestic product (GDP) and the creation or preservation of millions of jobs after only one year. The White House Council 

of Economic Advisors estimates that ARRA 

raised the national GDP by 2.7 percent and 

increased employment by 2.7 to 3.7 million 

compared to what these figures otherwise 

would have been through the third quarter of 

2010.1

 The SRFs have played a vital role by 

executing more than 3,200 assistance agreements worth over $5.6 billion for clean water 

and drinking water projects that will continue 

to confer economic, environmental, and public 

health benefits for years to come. 

This report highlights the performance of 

the SRFs in their implementation of ARRA. 

It also features case studies that emphasize 

the role of ARRA in funding wastewater 

and drinking water infrastructure projects 

that will contribute to long-term economic 

productivity, environmental sustainability, 

and public health protection, many of which 

would not have otherwise been funded. 

1

 The Executive Office of the President of the United States, Council of Economic Advisors. November 2010. The Economic Impact of 

the American Recovery and Reinvestment Act of 2009. Fifth Quarterly Report. Available at: http://www.whitehouse.gov/sites/default/

files/cea_5th_arra_report.pdf. 

Figure 1: ARRA Appropriation of Money to the Clean Water and Drinking Water 

State Revolving Funds

CWSRF Investment

$4 B

DWSRF Investment

$2 B

Other Core 

Infrastructure

Investment

$45.2 B
6 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

EPA and the states worked closely together to 

ensure that ARRA funds were awarded to highpriority eligible water and wastewater projects 

as soon as possible after the enactment of the 

Recovery Act. For example, California’s Clean 

Water SRF funded its first ARRA project the 

same day it received stimulus money from EPA.

By June 17, 2009, SRF programs had executed 

150 assistance agreements, obligating more than 

$316 million for clean water and drinking water 

infrastructure projects. Maine distinguished itself by awarding nearly 50 percent of its SRF 

funds to assistance recipients by June 17, 2009. 

By October 17, national numbers had increased 

dramatically, with 1,342 assistance agreements 

obligating nearly $2.4 billion to projects and 

1,169 projects under construction. Twenty-three 

state SRF programs (including Puerto Rico) had 

obligated more than 50 percent of their ARRA 

funds, and 15 states had over 50 percent of their 

ARRA funds under construction.

In March 2010, all states submitted certification that their ARRA funds were under con-

•	 February 17, 2010: All ARRA funds must be 

under contract or construction.

•	 State Match: No state matching funds are 

required.

•	 Additional Subsidization: At least 50 percent 

of ARRA funds must be used to provide 

additional subsidization, such as grants, principal

forgiveness, or negative interest rate loans.

•	 Green Project Reserve: Where applications are

made, at least 20 percent of ARRA funds must

be used for four types of projects – 

(1)	 Water efficiency improvements,

(2)	 Energy efficiency improvements,

(3)	 Green infrastructure, and

(4)	 Environmentally innovative projects.

•	 Buy American: All iron, steel, and manufactured

goods incorporated into projects that receive 

any ARRA funds must be made in the United 

States unless a waiver is received from EPA.

•	 Davis-Bacon Wage Rates: All laborers and 

mechanics working on projects funded in whole 

or in part by ARRA must be paid prevailing wages 

as determined by the U.S. Department of Labor.

Figure 2: ARRA Requirements At A Glance

THE SRF PROGRAMS DELIVER RESULTS
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 7

tract or construction by February 17, 2010. In 

total, more than three thousand (3,272) assistance agreements were signed, totaling $5.6 

billion – $3.8 billion for wastewater projects 

and $1.8 billion for drinking water projects – 

in one year. In addition, 2,832 ARRA drinking water and wastewater projects had begun 

construction by February 17, 2010, generating thousands of jobs in construction and 

other industries. 

The economic stimulus effects from these 

investments in water and wastewater infrastructure will continue to be felt in communities as SRF projects progress to completion. 

ARRA funding of SRF 

projects helps to ensure

clean water and safe

drinking water for the

nation

State SRF programs used ARRA dollars to fund 

a wide range of project types with significant 

water quality and public health benefits. Our 

water and wastewater infrastructure is often 

taken for granted, even though many indicators 

such as rapidly aging infrastructure, population growth, and geographic shifts suggest that 

community spending on this life-sustaining infrastructure is inadequate to meet the needs of 

the future. ARRA funding of the SRF programs 

helped to mitigate these concerns. 

For the Clean Water SRF programs, ARRAfunded projects include upgrades at publicly 

owned treatment works, such as rehabilitation 

of failing systems and upgrades of treatment 

Figure 3: ARRA Funding Progress by the SRF Programs

Assistance Agreements

Construction Started

0

10%

June 17,

2009

Oct. 17,

2009

Feb. 17,

2010

20%

30%

40%

50%

60%

70%

80%

90%

100%

% of ARRA Funds Available
8 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

processes and correction of sewer overflows, 

as well as nonpoint source (NPS) and estuary 

projects. Among others, NPS and estuary projects include green stormwater management 

projects to reduce erosion and the flow of nutrients and harmful chemicals into our nation’s 

waterways. These projects will help protect 

and improve our nation’s waterways for aquatic 

life and wildlife, recreation, agriculture, and industrial use. 

Drinking Water SRF ARRA funds are funding treatment facility construction and upgrade as well as storage, transmission, and 

distribution projects. Many of these improvements were needed to ensure compliance with 

the health-based standards of the Safe Drinking Water Act and improve water systems 

threatened by contamination due to aging 

infrastructure. Additionally, funds directed 

to small and disadvantaged communities will 

extend access to safe drinking water where 

current systems are inadequate or failing. 

ARRA subsidies allow

communities to

build critical water

infrastructure

The Recovery Act allowed states to provide 

additional subsidization for SRF projects in 

the form of principal forgiveness, grants, 

negative interest, or a combination. Nearly 

three-quarters (74 percent) of total ARRA 

funds awarded by the SRFs were in the form 

of additional subsidization – well above the 

50 percent requirement. For the Clean Water 

SRF programs, grants and principal forgiveness accounted for $2.9 billion, or 76 percent, 

of ARRA funds awarded. Negative interest, 

grants, and principal forgiveness amounted 

to $1.3 billion, or 71 percent, of ARRA funds 

awarded by the Drinking Water SRF programs. Principal forgiveness was most commonly offered as subsidy by states because 

most states found it easier to administer than 

grants or negative interest. 

Many states provided additional subsidization for projects in economically disadvantaged communities or for projects eligible for 

the Green Project Reserve (GPR). The provision of additional subsidy for ARRA projects 

offered a rare opportunity for disadvantaged 

communities – those that cannot afford to build 

new systems or charge the higher rates necessary to repay loans – to address long-standing 

“Clean, safe water is one of the bedrock foundations of communities and 

an economy that can grow and thrive. This money is an important start to 

upgrade our aging infrastructure, while creating well-paid, ‘green’ jobs.”

Ira Leighton

United States Environmental Protection Agency, Region 1, 

Deputy Regional Administrator
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 9

deficiencies in their water and wastewater infrastructure. Additionally, Rod Geisler, Chief 

of the Municipal Programs Section of the Bureau of Water at the Kansas Department of 

Health and Environment, expressed the view 

that offering additional subsidization for GPR 

projects attracted borrowers who would not 

normally apply for Clean Water SRF funding. 

Indeed, many states received applications from 

nonprofit organizations for projects that were 

eligible for the Green Project Reserve. 

ARRA subsidies were crucial in advancing 

long-sought water and wastewater system 

improvements in many communities. For example, Colorado water utilities face significant 

hurdles upgrading systems that are, in some 

cases, decades old. “The staff at the Colorado 

Department of Public Health and Environment [CDPHE] was extremely diligent about 

identifying priority water projects, reviewing 

engineering designs, and working closely with 

the Colorado Water Resources and Power Development Authority and the Department of 

Local Affairs to get these dollars out the door 

and into the economy,” said Martha Rudolph, 

the executive director at CDPHE. “Many of 

these projects have been on our list of identified projects for years and have significant infrastructure needs for the protection of public 

health and the environment. Without Recovery Act funding and loan forgiveness, the projects would not have been possible.” 

Promoting long-term

sustainability with the

Green Project Reserve

ARRA required states to allocate at least 20 

percent of their ARRA capitalization grant 

awards to the Green Project Reserve, which 

included four types of projects: green infrastructure, water efficiency improvements, energy efficiency improvements, and environmentally innovative activities. Although these 

types of projects have always been eligible for 

Clean Water SRF financing, funding of them 

has varied among the state SRF programs, 

and the 20 percent ARRA requirement was 

intended to accelerate the incorporation of 

“green” and sustainable concepts into wastewater and drinking water projects. EPA Administrator Lisa Jackson called the GPR “one 

of the most exciting aspects of the Recovery 

Act.” 

In one year, the SRF programs allocated 

$1.7 billion to the Green Project Reserve, 

well above the 20 percent requirement.2

 As 

Figure 5 shows, 45 percent of the funding 

went towards improving energy efficiency 

“These types of loans have offered 

communities throughout our state 

opportunities to move forward 

with projects when finding other 

sources of financing might 

be difficult. This is a good 

partnership between local, state, 

and federal governments.” 

Justin P. Wilson

Comptroller, Tennessee Local Development 

Authority

Energy Efficiency – $744 M

Water Efficiency – $491 M 

Green Infrastructure – $200 M

Environmental Innovations – $232 M

National GPR Funding Per Category

2

 Though states did report for GPR up to the 20 percent requirement, many did not account for additional projects or portions thereof 

that qualified as green projects. 
10 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

at wastewater and drinking water treatment 

plants, including installation of premium efficiency pumps and blowers, electricity system 

upgrades, and installation of wind turbines 

and solar panels at clean water and drinking 

water facilities. Another 29 percent went towards water efficiency projects, which include 

installation of water meters, water reclamation activities, and replacement of water-using fixtures. Green stormwater infrastructure 

projects accounted for 14 percent of GPR 

funding and include rain gardens, green roofs, 

street tree boxes, and pervious pavement. Finally, 12 percent of GPR funds went towards 

environmentally innovative projects, which 

include wetland restoration, decentralized 

wastewater treatment systems, adaptive measures to cope with climate change impacts, 

and use of other innovative technologies. 

These projects will save communities money 

in energy costs and contribute to long-term 

sustainability by reducing pressure on limited 

drinking water resources, protecting surface 

waters from contaminated stormwater runoff, 

and reducing the carbon footprint of the nation’s water infrastructure. 

Figure 4: ARRA Funding for GPR Projects and Project Components

ARRA Funding for Traditional 

SRF Projects

Energy Efficiency

Water Efficiency

Green Infrastructure

Environmental Innovation

ARRA Funding for GPR

70% 30%

45%

29%

14%

12%

“These funds will contribute significantly towards improving the 

sustainability of our wastewater operations and prepare us for Austin’s 

growing population.” 

Greg Meszaros

Director, Austin Water Utility
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 11

West Monroe is a small town in Louisiana 

with a population of 13,500. In recent years, 

several large employers have closed businesses in West Monroe and taken good jobs 

with them when they left. Graphic Packaging 

International, Inc. (GPI), a manufacturer of 

paper food and beverage packaging that employs 1,200 people in the town and 637 other 

workers that harvest timber and transport it 

to the plant might have been the latest employer to leave West Monroe but for ARRA.

GPI’s manufacturing processes currently rely 

on water from the Sparta Aquifer, which also 

serves as a source of ground water for 16 parishes in northern Louisiana. The aquifer is currently overdrawn by 17 to 18 million gallons 

per day (MGD). As a result, GPI’s wells in the 

aquifer are increasingly salty and corrosive. 

Several years ago, the town of West Monroe 

and GPI began working together to develop 

an innovative solution to the water shortage 

in the Sparta Aquifer. They implemented a pilot project to test an innovative combination 

of drinking water treatment technology – 

dissolved air flotation followed by pressurized 

granular activated carbon and chlorination – 

to treat wastewater for reuse in GPI’s industrial processes. For GPI to use the recycled 

water to manufacture food and beverage packaging, treated wastewater effluent must meet 

EPA Primary Drinking Water Standards and 

stringent FDA contamination levels. The 

treated water passed both tests. 

Thanks in part to a $4,750,000 ARRA loan 

with 100 percent principal forgiveness, West 

Monroe and GPI are now seeing their partnership come to fruition with the full-scale 

installation of their tested treatment process into an existing 7.5 MGD wastewater 

treatment plant. This ARRA-funded water

efficiency project is part of the Green 

West Monroe, Louisiana: Preserving Jobs while Saving Water

 CLEAN WATER STATE REVOLVING FUND 

CASE STUDIES
12 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

Project Reserve, and the new treatment plant 

will virtually eliminate the current pollution 

discharged into the Ouachita River by the 

existing treatment facility. Water reuse will 

significantly reduce GPI’s current 10 MGD 

demand for process water from the Sparta 

Aquifer, providing relief from severely declining water levels in the aquifer. In addition 

to the direct and indirect jobs supported by 

project construction, many in West Monroe 

credit this project with helping to preserve 

the 1,200 local jobs that are the lifeblood of 

this small community. 

Communities in southern West Virginia, including Lincoln County, are some of the 

poorest and most rural in the state. These 

communities have very little capacity to assume debt for infrastructure improvements, 

but studies in some communities show that 

approximately 67 percent of households have 

inadequate wastewater treatment.3

 Many 

homes discharge raw sewage into rivers and 

streams via straight pipes, and the vast majority of streams in the region are severely 

impaired by fecal coliform and related pollutants. Despite significant wastewater needs, 

there are few financial resources available to 

these small, rural communities.

To address some of these problems, the Lincoln County Commission and West Virginia 

Department of Environmental Protection 

(DEP) began a project funded by the U.S. 

EPA in 2005 to demonstrate the water quality 

benefits of installing innovative decentralized 

wastewater systems for homes where current 

septic systems were failing or nonexistent.4

As of October 2009, 40 homes either had new 

systems installed or had bids awarded for installation. As part of these efforts, a variety 

of electronic and paper reports will be shared 

with project stakeholders, state agencies, legislators, and the community; workshops will 

highlight findings from the project, lessons 

learned, and areas needed for improvement; 

and educational flyers will provide information to homeowners to help them understand 

and maintain their wastewater systems.

The Recovery Act helped extend these efforts 

by allowing DEP and the Lincoln County 

3

 Canaan Valley Institute. February 2008. Developing Effective Wastewater Management in Rural, Low Income West Virginia Communities.

Available at: http://www.canaanvi.org/canaanvi_web/uploadedFiles/Wastewater/Lincoln_Co_FlexE_Conference_Report.pdf. 

4

 U.S. EP A (2005). Lincoln County – US EPA Cooperative Project: Final Report—Key Lessons Learned. 

Available at http://www.epa.gov/owm/septic/pubs/mudriverwv_finalreport.pdf.

Lincoln County, West Virginia: Decentralized Systems for the

Economically Disadvantaged 
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 13

Georgetown, Colorado: Protecting a Threatened Watershed

with POTW Upgrades and Innovations

Commission to address additional wastewater needs of residents in Lincoln County. The 

Commission is using a $718,626 ARRA loan, 

all of which is being provided in the form of 

principal forgiveness, to fund the construction 

of on-site wastewater systems for 19 residences in the community of Alkol, in the Left Fork 

watershed of the Mud River. The systems use 

innovative peat filters that pretreat septic system effluent, removing high concentrations of 

nutrients and producing a high-quality effluent with less biological oxygen demand, fewer 

total suspended solids, and reduced fecal coliform bacteria. Construction is expected to be 

completed by November 2011. The on-site 

systems will replace direct discharges from 

homes or failing septic systems and reduce pollutants that are negatively impacting surface 

and ground water in the watershed, helping to 

protect the environment and public health.

The historic silver mining town of Georgetown is nestled among some of Colorado’s 

most majestic mountain peaks near the headwaters of the Clear Creek Watershed. The 

575-square-mile Clear Creek Watershed 

stretches from the Continental Divide down 

to the urbanized plains at its confluence with 

the South Platte River just north of Denver. 

Clear Creek serves as the principal drinking 

water source for more than one-quarter million people living in the Denver metropolitan 

area, as well as the upper Clear Creek Watershed communities that include Georgetown, 

Silver Plume, Empire, Idaho Springs, Black 

Hawk, and Central City. It is also prime riparian and wildlife habitat and a favorite among 

locals and tourists for recreational activities 

like kayaking, rafting, and fishing. However, 

Clear Creek is struggling with excessive nutrient loading, impairments associated with E. 

coli, sedimentation, and the residual effects of 

Colorado’s storied mining past. 

Georgetown received a $5.8 million ARRA 

loan with $2 million in principal forgiveness from the Colorado Department of Public Health and Environment to upgrade the 

town’s existing wastewater treatment facility. 

The facility’s conventional activated sludge 

treatment process will be replaced with advanced biological nutrient removal and upflow reactive sand filters for enhanced reduction in phosphorus and zinc levels in treated 

effluent. Upgrades also include the addition 

of biological de-nitrification unit processes 

using anoxic reactors for nutrient removal, 

which will reduce the need for chemical treatment at the facility. 

This project will improve the quality of Clear 

Creek and aid in protecting a valuable drinking water source while also undertaking sustainable design planning considerations and 

construction methods. Xeriscaping and stabilization controls put in place during construction are designed to minimize surface run-off 

and erosion. The facility will also implement 

a facility-wide non-potable water system designed to utilize treated effluent for operational processes such as wash-down water, 

toilet flushing, landscape irrigation, and onsite chemical generation.
14 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

REGION 1

Rhode Island advanced water conservation by allocating 43 percent of its ARRA Drinking Water SRF capitalization grant to water efficiency projects. 

REGION 2

New York’s new “Green Innovation Grant Program”

funded nearly 50 sustainable clean water and drinking 

water projects worth over $44 million by leveraging 

partnerships with other state agencies and reaching 

out to municipalities, nonprofits, and businesses. 

REGION 3

Maryland funded numerous stormwater management 

projects under its “Living Shorelines Stewardship 

Initiative,” which aims to improve water quality and

enhance habitat in the Chesapeake Bay. Together,

Pennsylvania and Maryland account for 35 percent of 

all stormwater projects.

REGION 4 

Florida directed 50 percent of its ARRA capitalization

grants to economically disadvantaged communities

with important water and wastewater needs. 

REGION 5 

Ohio ensured that a wide variety of communities benefitted from stimulus funding by providing assistance

to 335 projects – more than two times that of any

other state. 

Wisconsin leads the nation in disbursing ARRA funds,

with 96.5% of its ARRA capitalization grants outlayed

through December 31, 2010.

REGION 6 

Texas is funding an environmentally innovative project to enhance treatment and handling of biosolids,

which will save thousands of dollars in energy costs 

per year, reduce the carbon footprint of the treatment

facility, and create 560 local jobs in the city of Austin. 

REGION 7 

Kansas prioritized sustainable water and wastewatermanagement and treatment by allocating almost 85 percent of

its ARRA capitalization grantto the Green Project Reserve.

REGION 8

ARRA-funded drinking water projects in Colorado will 

deliver $7.3 million in savings over the next 20 years

through increased energy efficiency, reduced operating costs, restored billing revenue, and avoided maintenance costs. 

The Recovery Act is helping to fund construction of a water treatment plant in South Dakota that is expected to 

create or save approximately 600 construction jobs over

the nearly three-year life of the project.

SELECTED PROGRAM AND PROJECT HIGHLIGHts
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 15

REGION 9 

California is funding six projects for one water utility

serving nearly one million residents to advance its 

comprehensive strategy to be energy self-sufficient

and off the electric grid by 2020. 

REGION 10 

Washington funded over $5 million worth in green 

stormwater management projects that will help to address the number-one cause of urban water pollution

in the state. 

The Alaska Clean Water SRF program is funding the 

first LEED-certified building in Alaska, which is designed as a zero-waste and zero net energy resource

recovery and training facility. 
16 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

In 2007, The Executive Office of Energy and 

Environmental Affairs and the Massachusetts 

Department of Environmental Protection 

launched the first phase of the Massachusetts 

Energy Management Pilot for Drinking Water 

and Wastewater Treatment Facilities. A total 

of 14 facilities are currently part of this project, 

including 7 wastewater facilities and 7 drinking water treatment facilities, with the purpose 

of reducing the amount of energy used in municipal treatment facilities and greenhouse gas 

emissions by 20% while also saving local communities money through the establishment 

of public-private partnerships. In addition to 

working with the Department of Energy Resources, EPA Region 1, The Massachusetts 

Renewable Energy Trust, the Consortium for 

Energy Efficiency, University of Massachusetts 

at Amherst, and major gas and electric utilities, 

each of these projects has also received funding 

through the SRF program and ARRA. Through 

these sources, all 14 pilot projects, which total 

$45.8 million, as well as an additional 7 “green 

sites,” were fully funded. In total, these 21 sites 

are estimated to realize over $5 million in potential energy savings, and over 29 million kWh 

are expected to be saved annually – enough to 

power 3,450 average-sized homes for a year.5,6

Senator John Kerry said, “This investment will 

help sustain our high clean drinking water standards without using so much energy. Facilities 

throughout our state can continue to ensure our 

water is clean and safe, reduce harmful greenhouse 

gas emissions, and help put people back to work.” 

5

 Massachusetts DEP (2010). The Massachusetts Energy Management Pilot.

Available at http://www.mass.gov/dep/water/wastewater/empilot.htm.

6

 U.S. Energy Information Administration, March 2010. Independent Statistics and Analysis available at 

http://www.eia.doe.gov/ask/electricity_faqs.asp#electricity_use_home.

DRINKING WATER STATE REVOLVING FUND 

CASE STUDIES

Worcester, Massachusetts: Harnessing Solar Energy for Clean Water
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 17

As part of the Massachusetts Energy Management Pilot, the city of Worcester is undertaking a $1.2 million project funded by ARRA to 

increase energy efficiency and the use of renewable energy at its water treatment plant (WTP). 

The WTP processes over 11 billion gallons of 

drinking water for 200,000 customers annually.

To enhance energy efficiency and reduce the 

WTP’s carbon footprint, Worcester will install an energy management system, upgrade 

its heating system, and install a 150 kW solar 

photovoltaic system at the WTP. The city will 

install an additional solar system at one or more 

qualified water treatment facilities or administration buildings. In total, these green investments will account for over $45,000 in annual 

energy savings and approximately 293 tons of 

annual carbon dioxide emissions reductions. 

In 2008, Hurricane Ike devastated infrastructure in the city of Galveston, including its 

water system. In the aftermath, Galveston’s 

city manager, Steve LeBlanc, said, “Our water 

system is bleeding, literally bleeding.... [A]t 

this point we have so many leaks in the system, we’re basically bleeding out more (water) 

than we’re pushing into the system.” Since 

then, repairs have improved the water system, 

but the city’s water distribution system still 

has insufficient capacity to serve the west end 

of Galveston Island. The Texas Commission 

on Environmental Quality (TCEQ) cited the 

city for both insufficient storage and pressure, 

and the city entered into an agreed order with 

TCEQ that requires the city to meet a minimum total capacity of 0.6 gallons per minute 

per connection requirement and a minimum 

elevated storage capacity of 100 gallons per 

connection, among other conditions. 

To comply with the order, the city proposed 

five water capacity projects and received a 

$17.2 million ARRA grant from the Texas 

Water Development Board. The water distribution system improvements include: 

•	 installation of pressure-sustaining valves

that will maintain water volume and 

pressure for the west end of Galveston; 

•	 installation of 8,393 linear feet of water

line to serve the west end of Galveston;

•	 construction of a new 2.0 MGD elevated

storage tank (EST) and disinfection system at Isla del Sol; 

•	 rehabilitation of the White Sands EST,

which was damaged by Hurricane Ike, 

with a new PVC coated fence, inside and 

outside tank coating, and drainage pipe 

supports; and

•	 construction of a new 2.0 MGD elevated

storage tank, disinfection system, and 

pumping station. 

The combined improvements in this disadvantaged community will help ensure continuous 

water service for over 100,000 people that are 

Galveston, Texas: Improving Water Service after

Hurricane Ike
18 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

served by the system. The ARRA subsidy was 

critical for the water system improvements, as the 

city qualifies as a disadvantaged community, with 

an adjusted median household income (MHI) for 

the service area that is less than 75 percent of 

the state MHI and a household cost factor that is 

greater than 2 percent for water services. 

The small, rural community of San Jerardo in 

Monterey County is the first housing cooperative in California for low-income farm worker 

families. It was once a dilapidated farm labor 

camp, but it is now a community of about 300 

residents where all families are able to participate in decision making that affects the residents. 

Although San Jerardo is only located about 

five miles south of water and wastewater infrastructure serving the city of Salinas, water 

quality service in San Jerardo is quite different. The San Jerardo community has been under a bottled water order for drinking water 

since 2001. Well water from the area exceeds 

the maximum contaminant levels for nitrate – 

an acute contaminant – and trichloropropane 

(TCP), which is recognized by California as 

a cancer-causing agent. An EPA lawsuit resulted in the San Jerardo water system being 

placed under federal court receivership for 

violations of the federal Safe Drinking Water 

Act.7

 Due to high levels of water contamination, the process of finding a new water operator stalled for years, and pursuit of state 

and federal funds was delayed. 

Under the federal receivership, the Monterey 

County Board of Supervisors spearheaded 

efforts to provide San Jerardo with an onsite 

emergency treatment system using absorption and ion exchange technology to remove 

nitrate and TCP. The system was implemented in 2007, but the community has struggled 

to pay the costs associated with operating and 

maintaining the interim system, further punctuating the need for a permanent solution to 

the public health and water quality problems. 

In response to an ARRA project application 

by Monterey County, the California Department of Public Health issued a $2.7 million 

loan with 100 percent principal forgiveness to 

upgrade the San Jerardo drinking water system and bring it into compliance with regulations. It will include a new drinking water supply production well, a new storage reservoir, a 

new transmission pipeline and booster station, 

and emergency intertie for secondary supply. 

ARRA subsidization of this project, in the 

form of principal forgiveness, was critical. 

The California Department of Public Health 

lists San Jerardo as a severely disadvantaged 

community with a median household income 

(MHI) that is less than 60 percent of the 

statewide annual MHI. The community has 

struggled with paying the onsite emergency 

treatment costs while waiting for a new well, 

and it could not afford the additional expense 

associated with a new system. ARRA subsidies 

will relieve some of the community’s financial 

stress while helping to protect public health.

Monterey County, California: Providing Safe Water to the

Severely Disadvantaged

7

 California State Water Resources Control Board (2010). Board Meeting Session – Division of Financial Assistance. March 16, 2010. 
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 19

The American Recovery and Reinvestment Act 

of 2009 presented new challenges and opportunities for the SRF programs, with new requirements and new authorities. 

In order to get the funds to communities as 

quickly as possible, Congress required that 

EPA’s Administrator reallocate funds where 

projects were not under contract or construction within one year of enactment. In addition, 

Congress stated a goal of having at least half of 

the funds under contract within 120 days. Congress eliminated state match requirements and 

required states to provide at least 50 percent of 

Federal ARRA funds in the form of additional subsidization. Congress also required that, 

where sufficient applications were submitted, 20 

percent of the funds go towards four categories 

of green projects – green infrastructure, water efficiency improvements, energy efficiency 

improvements, and environmentally innovative 

activities. Additional new provisions passed on 

to local recipients of ARRA loans and grants 

included requirements to buy American iron, 

steel, and manufactured goods and to pay laborers and mechanics at prevailing wage rates.

“The Recovery Act has pulled 

our nation back from the worst 

economic crisis in generations and 

provided real relief for families 

and small businesses. EPA’s 

investments in green jobs and 

clean communities are growing 

our economy and building a 

new foundation for prosperity. 

We’re putting people to work 

and creating cleaner, healthier 

environments that are better 

places to buy a home or set up a 

business.”

Lisa P. Jackson

United States Environmental Protection 

Agency Administrator

 APPENDIX: 

COORDINATED IMPLEMENTATION OF ARRA
20 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

EPA focused its efforts on moving money 

quickly and providing support for state SRF 

program implementation of ARRA requirements. While Congress was passing legislation, EPA held online webcasts, meetings, and 

conference calls with state and Regional EPA 

SRF staff to discuss how potential provisions 

might be implemented. EPA worked quickly 

to release guidance when the final version of 

the Recovery Act legislation was passed and 

signed by the President on February 17th, 

2009. EPA published the final ARRA guidance less than two weeks later, on March 2nd.

The quick reaction by EPA allowed states to begin implementing the provisions of ARRA with 

minimal delay. After years of successfully managing large water quality programs such as the 

SRFs, states hit the ground running. In fact, a 

number of states began reaching out to communities to identify “shovel-ready” projects several 

months before the stimulus package passed. 

Due to the significant amount of publicity in 

advance of the passage of the Recovery Act, 

states received many more – sometimes more 

than ten times more – inquiries for funding than 

they typically received in a year. In addition, 

state SRF staff proactively reached out to communities to identify potential ARRA projects. 

State employees reviewed thousands of initial 

applications to prioritize the projects based on 

economic impact, financial need, environmental 

benefit, public health, and adherence to ARRA 

goals and requirements. State SRF programs 

accomplished all of this work despite facing furloughs and hiring freezes in many cases. 

FIGURE 5: How the ARRA Money Moves

through the SRF Programs

CONGRESS/TREASURY

$6 B Appropriation

EPA SRF PROGRAMS

Capitalization Grants

STATE AGENCIES

ASSISTANCE RECIPIENTS

CONTRACTORS

AND VENDORS

Payments 

for Services

Loan 

Repayments

Grants and 

Low-interest Loans

State agencies 

identify projects 

for funding

Assistance 

recipients prepare 

projects, request 

bids and awards

Project construction

begins; contractors

and vendors submit

invoices for services
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 21

February 17, 2009: President 

Obama signs American Recovery 

and Reinvestment Act of 2009,

appropriating $4 billion to the Clean

Water SRF programs and $2 billion to

the Drinking Water SRF programs to 

aid in the economic recovery.

February – July: EPA conducts 

more than 10 online webcasts for 

states and municipalities about

ARRA implementation topics.

March 2, 2009: EPA publishes 

final guidance on ARRA

implementation.

March 12, 2009: EPA awards the 

first SRF ARRA funds to several

states.

April 28, 2009: EPA issues 

Buy American implementation

procedures and establishes a 

waiver process.

May – November: State SRF 

programs, often with assistance

from EPA, conduct dozens of

workshops for ARRA assistance 

recipients about program 

requirements.

June 22, 2009: EPA publishes 

Questions and Answers on the 

Green Project Reserve, responding

to common inquiries.

July 1, 2009: EPA publishes 

project tracking and reporting

guidance. At the same time, the

ARRA project data entry system 

goes live in the Clean Water SRF 

Benefits Reporting System and

the Drinking Water SRF Project & 

Benefits Reporting System. States

can now enter all of the program 

progress and jobs data required 

by the Administration, Congress,

and EPA into a simple form for easy 

download.

August 17, 2009: Six months 

after ARRA is authorized, 29 Clean

Water SRF state programs have 

awarded $663 million in ARRA 

assistance to 318 projects, and 31

Drinking Water SRF state programs 

have provided $339 million in 

ARRA assistance to 234 projects.

October 1-10, 2009: All states are 

required to report on ARRA progress 

and jobs created and maintained 

to the Office of Management and

Budgetforthe first time. 

October 13, 2009: ARRA funds 

have been awarded to all 50 states 

and Puerto Rico.

November 17, 2009: Nine 

months after ARRA is authorized,

48 state Clean Water SRF programs

have made $2 billion in loans

and grants to 965 projects, and

45 Drinking Water SRF programs 

have made $905 million in loans 

and grants to 737 projects. Of

these, 1,697 projects have begun

construction in both SRF programs,

and $752 million in financing

for 622 GPR projects has been

awarded.

January 15-22, 2010: States 

are required to submit a second 

round of quarterly reports on 

ARRA progress and jobs created 

and maintained to the Office of

Management and Budget. 

February 17, 2010: States 

certified that all ARRA funds are

under contract or construction in

the Clean Water SRF and Drinking 

Water SRF programs, with $3.8

billion in ARRA Clean Water SRF 

assistance provided and $1.8

billion in ARRA Drinking Water SRF 

assistance.8

 All state SRF programs 

have met the Green Project 

Reserve requirement, with a total

of $1.7 billion awarded to green

projects nationwide. 

December 31, 2010: States have 

disbursedmore than 70%of available

ARRA capitalization grant funds.

FEB MAR APR

2009 2010

MAY JUN JUL AUG OCT NOV JAN FEB DEC

ARRA TIMELINE – REQUIREMENTS AND ACHIEVEMENTS

8

 States are authorized to use up to 4% of their capitalization grants for administration of the program. In addition, 1% of the Clean Water 

SRF allotment is diverted to the 604(b) Water Quality Management Planning Grant program, and Drinking Water SRF programs may 

divert as much as 17% of their grants for set-asides that benefit drinking water quality.
22 IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

ARRA STATISTICS AT A GLANCE 

CLEAN WATER STATE REVOLVING FUND

Total ARRA Assistance Provided1 $3.81 billion

Total ARRA Assistance Disbursed3 $2.8 billion

Total ARRA Funding Agreements1 1,913

ARRA Funding Agreements by 

Population Size1 

No. $ billions

< 3,500 791 $0.90 billion

3,500-9,999 327 $0.63 billion

10,000-99,999 575 $1.19 billion

100,000 and Above 220 $1.09 billion

Total ARRA Principal Forgiven or 

Grants4

$2.90 billion

Total ARRA Green Project Reserve4 $1.1 billion

Total FY2010 Assistance Provided

(ARRA and Base)1

$10.0 billion

DRINKING WATER STATE REVOLVING FUND

Total ARRA Assistance Provided2 $1.80 billion

Total ARRA Assistance Disbursed3 $1.4 billion

Total ARRA Funding Agreements2 1,359

ARRA Funding Agreements by 

Population Size2

No. $ billions

< 501 233 $0.13 billion

501-3,300 410 $0.34 billion

3,301-10,000 275 $0.36 billion

10,001-100,000 354 $0.64 billion

100,001 and Above 87 $0.34 billion

Total ARRA Principal Forgiven,

Negative Interest, or Grants5

$1.3 billion

Total ARRA Green Project Reserve5 $538 million

Total FY2010 Assistance Provided

(ARRA and Base)2

$3.83 billion

1

 EPA Clean Water SRF National Information Management System. Data through 6/30/10.

2

 EPA Drinking Water SRF National Information Management System. Data through 6/30/10.

3

 EPA Integrated Financial Management System. Data through 12/31/10.

4

 Clean Water SRF Benefits Reporting Systems. Data through 1/24/11.

5

 Drinking Water SRF Project and Benefits Reporting Systems. Data through 1/24/11.
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS 23

Clean Water State Revolving Fund Branch

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue, NW (Mail Code 4204M)

Washington, D.C. 20460

Phone 202.564.0752 Fax 202.501.2403

http://water.epa.gov/grants_funding/cwf/cwsrf_index.cfm

Drinking Water State Revolving Fund Program

U.S. Environmental Protection Agency

1201 Constitution Avenue, NW (Mailcode 4606M)

Washington, D.C. 20004

Phone 202.564.2051 Fax 202.564.3757

http://water.epa.gov/grants_funding/sdwa/index.cfm
Infrastructure

Loans

Performance

Clean Water

State Climate Change

Sustainability

Capital

Stimulus

Public Health

Savings

Wastewater

Drinking Water

Green

Finance

Water Quality

Watersheds

Communities

Creating Jobs

Revolving Fund

Strategic Management

Investment

Leveraging Public Utilities Stormwater

Performance Asset Management

OFFICE OF WATER · MAY 2011 · EPA-832-K-11-001